Australia power prices up 63% in a decade
New ACCC figures show why we're struggling to keep up.
Residential electricity prices have gone up by more than 63% over the last decade, according to new research from the Australian Competition and Consumer Commission (ACCC).
That increase is after allowing for the effects of inflation, demonstrating that 10 years of arguing over energy policy hasn't done much to improve bills.
The number comes from the draft version of the ACCC's Retail Electricity Pricing Inquiry. The main contributor to the rise has been increasing costs in running the network, which are passed on to consumers.
The average annual household bill has gone up from $1,177 in 2007-08 to $1,691 in 2016-17, a rise of almost 44%. (The percentage rise in the bill cost is lower than the price rise because of the uptake of solar, which has led to lower prices for some households.)
Recent research suggests that official estimates of power bills may be out by as much as 25%, so the actual impact could be even worse.
"What's clear from our report is that price increases over the past ten years are putting Australian businesses and consumers under unacceptable pressure," ACCC chairman Rod Sims said. "The main reason customers' electricity bills have gone up is due to higher network costs, a fact which is not widely recognised. To a lesser extent, increasing green costs and retailer costs also contributed."
Here's what makes up that typical $1,691 per year power bill:
| Factor | % | Annual cost |
|---|---|---|
| Network | 40% | $702 |
| Generation | 17% | $530 |
| Green | 16% | $103 |
| Retail | 26% | $356 |
| Total | 100% | $1,691 |
The news comes as Federal cabinet is expected to debate its overall energy policy this week, with reports suggesting that plans for an official clean energy target (CET) are likely to be dropped.
While a stable policy would potentially lead to more investment from the private sector into energy infrastructure, that might not translate into immediate price reductions for consumers.
Power companies are being asked by the government to write to customers before Christmas and inform them when their existing offers expire.
However, you don't have to wait until then in order to compare and see if you can get a better deal on your energy bill. Research by finder.com.au suggests the average household could save $807 a year by switching providers.
A final version of the ACCC report is expected in June 2018.
Latest news headlines
- 3 tips to manage this year’s holiday credit card spending
- ASIC cracks down on risky online investments: What you need to know
- Top 10 TV shows in Australia this week and where to watch them
- Bushfire blindness: 6 million Australians close to bushland not ready for fires
- Finder’s RBA survey: Cash rate holds but rents could rise as much as 9.5% in 2024
Picture: Shutterstock
